Colgate-Palmolive Company (CL) FY Conference Summary Company Overview - **Company**: Colgate-Palmolive Company (CL) - **Date of Conference**: June 10, 2025 - **Key Speakers**: John Fosher (Head of Investor Relations), JP Zamorano (President of Latin America) Key Points Company Strategy and Growth - Transitioned to a growth mindset focusing on driving category growth rather than just market share [3][4] - Core businesses, which account for 60% of revenue, were identified as needing turnaround, leading to investments in key products like Colgate Total [4] - Emphasis on faster growth adjacencies such as whitening and prescription diet segments [5] - Significant push towards e-commerce and pharmacy channels, especially in Latin America [5] Financial Performance - Achieved a gross margin recovery, allowing for increased advertising investment, raising the advertising-to-sales ratio from 9.1% to 13.5% [6] - Despite challenges like tariffs and foreign exchange impacts, the company is guiding for dollar-based earnings per share growth in 2025 [7] - Strong organic sales growth of 9.4% was reported in the first half of the previous year, with expectations for a tougher 2025 [10][11] Innovation and Product Development - Shifted focus from line extensions to breakthrough innovations, with a commitment to incubate smaller businesses for long-term growth [20][21] - Enhanced analytics capabilities to measure advertising effectiveness and revenue growth management [16][17] - The relaunch of Colgate Total is seen as a significant opportunity for premiumization, with market share increasing from 15% to 16.1% post-relaunch [49][52] Market Dynamics in Latin America - Latin America is the largest division for Colgate, with strong market shares in Brazil and Mexico [33] - The company has a balanced portfolio of global and regional brands, allowing for competition across multiple price tiers [38] - Recent consumer sentiment has been affected by inflation, but there are signs of improvement in Mexico and Brazil [45][46] Challenges and Opportunities - Currency volatility in Latin America is a significant challenge, but the company has strategies in place to manage pricing and costs effectively [61][64] - The premium dog food segment (Hill's) is identified as a growth opportunity in Mexico, with a relatively low market share [40][41] - The company is leveraging its strong market presence to capitalize on e-commerce growth and changes in pharmacy retail environments [55][58] Future Outlook - The company aims to deliver growth at the high end of the 3-5% range, with expectations for operating profit to grow ahead of sales [70][72] - Continued focus on premiumization and productivity improvements is expected to enhance profitability in Latin America [72][73] Additional Insights - The cultural evolution within the company emphasizes taking risks and driving performance [8] - The integration of North America and Latin America under one leadership is seen as a strategic move to leverage efficiencies and innovation [29][30] - The company is committed to maintaining a strong advertising presence while ensuring returns for shareholders [15][16]

Core Insights - The article emphasizes the importance of a growth mindset among leaders to drive sustainable growth and enhance shareholder returns, highlighting that high-growth companies achieve an average total shareholder return (TSR) that is 50% higher than their peers [1][2] - It identifies five key mindsets that leaders of growth-leading companies adopt: prioritizing growth, taking bold actions, being customer-centric, attracting and developing talent, and executing rigorously [3] Group 1: Commitment to Long-Term Growth - The first step in investing for growth is to establish long-term growth objectives and take action to achieve them. 72% of surveyed leaders set growth targets above industry benchmarks, but only 22% of their time is spent on long-term initiatives [4][7] - Companies that prioritize long-term growth over short-term gains tend to achieve higher revenue growth, yet many leaders struggle to allocate sufficient time and resources to long-term strategies [4][7] Group 2: Bold Actions for Growth - Bold actions involve breaking conventions and being willing to explore non-traditional growth opportunities. 83% of growth-leading companies encourage teams to experiment with new ideas and prioritize speed over perfection [8][12] - Growth-leading companies are more likely to regularly assess the progress of their growth plans and adjust resources accordingly, with a 10% higher tendency to evaluate plans monthly or quarterly [9] Group 3: Customer-Centric Approach - Optimizing customer experience is crucial for driving growth, with companies that prioritize customer experience seeing revenue growth rates twice that of their peers. 63% of leaders view customer feedback as a key source of growth ideas [13][16] - Despite recognizing the importance of customer insights, only 15% of leaders consistently incorporate customer feedback into decision-making [13][16] Group 4: Talent Development - Talent is essential for growth, yet 69% of leaders believe their organizations have significant talent gaps. Less than 8% are confident in their talent strategies to meet future growth needs [18][20] - Growth-leading companies focus on aligning talent development with growth objectives, fostering a culture that supports innovation and productivity [20] Group 5: Effective Execution - To achieve growth goals, leaders must establish a robust operational rhythm to manage growth initiatives and clarify responsibilities. Only 10% of leaders feel they have the necessary data and insights to support growth initiatives [20][21] - Successful growth transformations require consistent actions and the ability to adapt strategies based on performance evaluations and market changes [21][22]